The new leader who must change China

Article by: THE ECONOMIST

October 29, 2012 - 5:28 PM

Just after the 18th National Congress of the Chinese Communist Party, which starts in Beijing on Nov. 8, a short line of dark-suited men, and perhaps one woman, will step onto a red carpet in a room in the Great Hall of the People and meet the world's press.

At their head will be Xi Jinping, the newly anointed party chief, who in March will also take over as president of China. Behind him will file the new members of the Politburo Standing Committee, China's supreme body. The smiles will be wooden, the backs ramrod straight. Yet the stage-management could hardly be more different from the tempestuous uncertainties of actually governing.

As ruler of the world's new economic powerhouse, Xi will follow his recent predecessors in trying to combine economic growth with political stability. Yet this task is proving increasingly difficult. A slowing economy, corruption and myriad social problems are causing growing frustration among China's people and worry among its officials.

In coping with these tensions, Xi can continue to clamp down on discontent, or he can start to loosen the party's control. China's future will be determined by the answer to this question: Does Xi have the courage and vision to see that assuring his country's prosperity and stability in the future requires him to break with the past?

Who's Xi?

To the rich world, laboring under debt and political dysfunction, Chinese self-doubt might seem incongruous. Deng Xiaoping's relaunch of economic reforms in 1992 has resulted in two decades of extraordinary growth. In the past 10 years under the current leader, Hu Jintao, the economy has quadrupled in size. A new (though rudimentary) social safety net provides 95 percent of all Chinese with some kind of health coverage, up from just 15 percent in 2000. Across the world, China is seen as second in status and influence only to America.

Until recently, the Chinese were getting richer so fast that most of them had better things to worry about than how they were governed. But today China faces a set of threats that an official journal describes as "interlocked like dog's teeth."

The poor chafe at inequality, corruption, environmental ruin and land-grabs by officials. The middle class fret about contaminated food and many protect their savings by sending money abroad and signing up for foreign passports. The rich and powerful fight over the economy's vast wealth. Scholars at a recent government conference summed it up well: China is "unstable at the grass roots, dejected at the middle strata and out of control at the top."

Once, the party could bottle up dissent. But ordinary people today protest in public. They write books on previously taboo subjects and comment on everything in real time through China's vibrant new social media. Complaints that would once have remained local are now debated nationwide. If China's leaders mishandle the discontent, one senior economist warned in a secret report, it could cause "a chain reaction that results in social turmoil or violent revolution."

But, you don't need to think that China is on the brink of revolution to believe that it must change. The departing prime minister, Wen Jiabao, has more than once called China's development "unbalanced, uncoordinated and unsustainable."

Last week Qiushi, the party's main theoretical journal, called on the government to "press ahead with restructuring of the political system."

Xi portrays himself as a man of the people, and the party still says it represents the masses, but it is not the meritocracy that some Western observers claim. Those without connections are often stuck at the bottom of the pile. Having long since lost ideological legitimacy, and with slower growth sapping its economic legitimacy, the party needs a new claim on the loyalty of China's citizens.

Take a deep breath

Xi could start by giving a little more power to China's people. Rural land, now collectively owned, should be privatized and given to the peasants; the judicial system should offer people an answer to their grievances; the household registration, or hukou, system should be phased out to allow families of rural migrants access to properly funded health care and education in cities.

At the same time, he should start to loosen the party's grip. China's state-owned banks should be exposed to the rigors of competition; financial markets should respond to economic signals, not official controls; a free press would be a vital ally in the battle against corruption.

Such a path would be too much for those Chinese conservatives, who look scornfully at the West and insist on the Communist Party's claim -- its duty, even -- to keep the monopoly of power. Even many of the liberals who call for change would expect nothing more radical than Singapore-style one-party dominance.

To restore his citizens' faith in government, Xi also needs to venture deep into political reform. That might sound implausible, but in the 1980s no less a man than Deng spoke of China having a directly elected central leadership after 2050 -- and he cannot have imagined the transformation that his country has gone on to enjoy.

Zhu Rongji, Wen's predecessor, said that competitive elections should be extended to higher levels, "the sooner the better."

Ultimately political reform would make the party answerable to the courts and, as the purest expression of this, free political prisoners. It would scrap party membership requirements for official positions and abolish party committees in ministries. It would curb the power of the propaganda department to impose censorship and scrap the central military commission, which commits the People's Liberation Army to defend the party, not just the country.

No doubt Xi would balk at that. Even so, a great man would be bold. Independent candidates should be encouraged to stand for people's congresses, the local parliaments that operate at all levels of government, and they should have the freedom to let voters know what they think.

The Chinese Communist Party has a powerful story to tell. Despite its many faults, it has created wealth and hope that an older generation would have found unimaginable. Bold reform would create a surge of popular goodwill toward the party from ordinary Chinese people.

Xi comes at a crucial moment for China, when hardliners still deny the need for political change and insist that the state can put down dissent with force. For everyone else, too, Xi's choice will weigh heavily. The world has much more to fear from a weak, unstable China than from a strong one.